A maturing wheat crop in northern India in March. Photo: Dr US Awasthi, IFFCO Fertilisers

INDIA’S winter-crop harvest appears to have defied sustained dry periods in some regions throughout the growing season and above-average spring temperatures, with the Indian Government now expecting record wheat and corn harvests to help lift the country’s total grain production in its crop year to June to a new benchmark.

Late last month, India’s Ministry of Agriculture and Farmers Welfare (MoAFW) released its third advance estimate of production for major agricultural crops, putting national output at a record 354 million tonnes (Mt), 21.7Mt or 6.5 percent higher than the previous benchmark of 332.3Mt set just 12 months earlier.

The government attributed the record production to ideal weather conditions throughout much of the 2024 crop year. A timely, sufficient and well-distributed monsoon across the major grain-producing states in 2024 improved soil moisture and water availability, supporting higher planting and healthy crop development under optimal conditions.

Rice exports boom

The biggest crop in India each season is rice, with the agriculture ministry pegging 2024-25 production from the rabi and kharif harvests combined at a new record of 149.1Mt, surpassing the output from last season’s record of 137.9Mt by 8.1pc. This came off a record harvested area of 51.4 million hectares (Mha), 7.5pc higher than the 47.8Mha harvested a season earlier.

According to official data, state reserves of rice, including unmilled paddy, totalled a record 59.5Mt as of June 1, 18pc higher than a year ago and more than four times the government’s July 1 target of 13.5Mt. The increase in state stocks will enable the world’s biggest rice exporter to significantly increase shipments ahead of the next harvest, which kicks off in October.

India, which accounts for around 40pc of global rice exports each year, removed the last of its export limits on the grain in March, the earliest of which were imposed back in 2022 to contain domestic food inflation. Trade data to the end of March put exports since the beginning of October last year at 12.7Mt compared to 7.1Mt in the previous corresponding period. With shipments currently running at around 2Mt per month, a pace expected to be maintained in the near term, exports are forecast at a record 24.5Mt for the 12 months to the end of September.

Wheat stocks swell

Wheat is the primary rabi crop planted in India each season, and the government is forecasting output in the current crop year to set a new record of 117.5Mt, up from the previous record of 113.3Mt set last year. This was reaped off an area of 31.8Mha, up fractionally from 31.4Mha in 2023-24. However, there are industry bodies and local market pundits who are not as bullish and have the crop closer to the 110Mt mark. The US Department of Agriculture adopted the MoAFW’s forecast in this month’s global supply-and-demand update.

Government procurement since April 1 nudged past the critical 30Mt mark early last week to stand at 30,002,919t nationally as of June 18. The surge was thanks to an extended and robust purchasing drive in the north-western state of Rajasthan, where 225,516t was added to reserves in the preceding 25 days.

Wheat procurement has been the best in four years, helping push the government’s wheat reserves to their highest in the past four years. Purchases in the major wheat-producing states are above last year’s levels, except in Punjab and Haryana, where local millers reportedly stepped up their harvest cover activities this year to augment depleted stocks. The Food Corporation of India was reportedly holding 36.9Mt of wheat as of June 1, well above the government’s target of 27.6Mt.

The rebound in wheat stocks is particularly significant, bolstering food security while giving the government more ammunition to temper seasonal price spikes by releasing wheat on to the open market when supplies are lean. A string of poor harvests in recent years, coupled with weak procurement, has driven up wheat prices, stoking speculation on numerous occasions that India may need to import the grain for the first time since 2017.

Despite the surplus forecast, the government has no immediate plans to lift the wheat export ban or reduce the 40pc import tax, focusing instead on building reserves to buffer against future uncertainties. However, with domestic prices currently well above global trade values, export prospects are minimal, even to neighbouring landlocked countries such as Nepal and Bhutan.

With opening stocks as of April 1 of 11.8Mt, total wheat supply in India is forecast to increase from just under 121Mt last marketing year to 129Mt in the current marketing year. The USDA’s Foreign Agricultural Service based in New Delhi expects domestic demand to total 112.5Mt, comprised of 106Mt of food, seed, and industrial demand and 6.5Mt of feed and residual use. That will put carry-out at the end of March 2026 at 16.5Mt, 39.8pc higher than the previous season’s closing stocks.

Corn in demand for ethanol

Corn is India’s third-biggest crop each season and the third to break a production record in the 2024-25 crop year. The government estimates production at 42.3Mt, up from 37.7Mt a season earlier and 11pc higher than the previous record of 38.1Mt, which was set in the 2022-23 crop year. The harvested area was 12.02Mha, up from 11.24Mha last season.

The increase in plantings was the main driver of the bigger harvest, with domestic prices reflective of higher supply, having eased since harvest despite higher offtake of corn for ethanol production. The FAS is calling domestic demand 43.5Mt in the current marketing year, up from 42.3Mt a year earlier.

Food, seed and industrial use is expected to increase by 1Mt year on year to 19Mt, largely due to higher demand from the ethanol sector. On the other hand, feed and residual consumption is only expected to increase fractionally from 24.3Mt to 24.5Mt as cheaper grains, including broken rice, replace corn in the poultry ration.